Question

Alex buys a top of the line computer. He did not realize that the computer would lose value so fast. If his computer cost $1800.00 and it depreciates at a rate of 45% each year, in how many years will it be worth less than 1/3 of what he paid for it?

Answer 1

This can be solve by using the formula

D = P( 1 – i)^n

Where d is the depreciation value after n years

P is the initial value

i is the depreciation rate

n is the years

D = 1/3 ( 1800)

D = 600

So

600 = 1800 ( 1- 0.45)^n

Solve for n

N = 1.83 years